As the cryptocurrency market has been volatile since the halving of BTC, it has been in a consolidation phase for the past two and a half months. According to data from Bybit, Bitcoin experienced a pullback from Monday’s rally and hit a low of $61,045 during Tuesday’s midday session. As of the time of writing, the trading price was $61,590, a decrease of 2.4% in the past 24 hours.
Despite the sideways movement in the cryptocurrency market, the frenzy around meme stocks reignited with the return of Keith Gill, also known as “Roaring Kitten,” the leader of the GameStop saga, to the X platform after three years. After GameStop’s price surged by 74% on Monday, it soared by another 60% on Tuesday.
In addition to GameStop’s rise, AMC, a cinema chain operator, saw its stock price increase by over 100%. SunPower (SPWR) rose by 90%, Beyond Meat (BYND) rose by 25%, and Children’s Place rose by 6%. By the end of the day, the S&P, Dow Jones, and Nasdaq indexes all rose, with increases of 0.48%, 0.32%, and 0.75% respectively.
According to data from TradingView, on an annual chart, GameStop’s stock has had a return rate of over 154%, while Bitcoin’s annual return rate is around 129%. However, most of GameStop’s gains came in the past two days, surpassing those of BTC.
During the COVID-19 pandemic, Keith Gill was a key figure in the GameStop saga, and the retail frenzy led to a monthly increase of over 1,000% for GameStop. Within 24 hours of Roaring Kitten’s return to the X platform, GameStop’s stock price rose by 111%, while Dogecoin and SHIB saw increases of 6.2% and 5.4% respectively. On May 13th, the second day of Keith Gill’s return to social media, PEPE reached a new all-time high of over $0.000010.
Will the trend of 2021 be repeated?
Some Wall Street strategists believe that this new surge is far less crazy than the one three years ago, and the current market trend is still far from the retail inflow levels of 2021.
According to data from VandaTrack, GameStop had a net inflow of $15.8 million on Monday, while AMC attracted $37.5 million. In January 2021, the peak daily inflows for GameStop and AMC were $87.5 million and $170 million respectively.
In a research report on Tuesday, Marco Iachini, Senior Vice President of Vanda Research, wrote, “Both stocks have seen a surge in fund inflows, but the scale is still only a fraction of what we saw at the beginning of 2021.”
Nicholas Colas, co-founder of DataTrek, pointed out the difference between the current meme market and 2021 in a report to clients on Tuesday.
Colas said, “Back then, retail traders were stuck at home with nothing to do but trade stocks, and the US federal government not only airdropped trillions of dollars in stimulus money. Yes, we are confident we will hear more about meme stocks in the coming weeks, but it won’t be as enthusiastic as three years ago.”
Will GameStop give birth to a season of meme coins this year?
In the 2021 cycle, shortly after the GameStop short squeeze, there was a rebound in meme coins, and the return of the GameStop legend ignited new hope for meme coins.
According to a post by cryptocurrency analyst CryptoAmsterdam on May 14th, based on historical chart patterns, the rebound of meme coins in 2021 was immediately catalyzed by the GameStop rebound.
The analyst stated, “The blue on the left is the rise and top of GME in 2021. The blue on the right is what happens to meme coins after that event. Money is always flowing.”
CryptoAmsterdam pointed out in a subsequent post that the current market capitalization of meme coins is similar to the situation that catalyzed the meme coin bull market in 2021 and referenced the following chart.
However, the current investment environment is different. Josh Gilbert, a market analyst at eToro, stated that compared to 2021, the short position on GameStop is much smaller, which could greatly suppress the “scale of the rally”.
Gilbert analyzed, “The current environment is incomparable to 2021. Interest rates were at their lowest levels, governments around the world provided fiscal stimulus, and major global economies had almost no inflation.”
Inflation hinders the rise of risk assets
The latest Producer Price Index (PPI) released by the US on Tuesday showed a 0.5% month-on-month increase in wholesale prices in April, higher than the market expectation of 0.3%. Inflation concerns continue to significantly affect the prices of risk assets. This latest data point shows that inflation remains well above the Federal Reserve’s target of 2%, indicating that interest rates will remain at higher levels for a longer period as the US central bank tries to slow the rise in living costs.
Secure Digital Markets stated that although meme stocks and tokens have seen a surge in prices, US stock index futures fell after the unexpected high Producer Price Index (PPI) in April, weakening hopes for the Fed to cut interest rates later this year in a situation of weak inflation.
Analysts at Secure Digital Markets said, “If the Fed doesn’t cut interest rates early, investors may need to go through a relatively calm period, and for Bitcoin, the next market shock is not far away.”
Michaël van de Poppe, founder of MN Trading, believes that as long as Bitcoin bulls can hold onto $60,500, the next resistance level will be $63,000. However, if the support level of $60,500 is broken, BTC may drop to the support level between $52,000 and $55,000.
Author: Mary Liu from Bitpush News
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Tags:
GameStop
MEME
Meme coins
Bitpush Daily Market News
Bitcoin
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Disclaimer: All articles from Bitpush represent the author’s point of view and do not constitute investment advice.
Original article link:
https://www.bitpush.news/articles/6725360
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